The South of Italy is shifting towards Central-Northern Italy: has the recovery process been initiated?

The data on the territorial breakdown disclosed by Istat last week show that, in 2016, in Italy, the growth of GDP by 0.9% was driven by the North East of Italy (+1.2%) and by the South, whereby the latter attained a result aligned with the national average. The North West and Central Italy fall below this target (0.8% and 0.7% respectively).

What are the dynamics behind such results?

In Central-Northern Italy and in the South alike, the trade, public business, transport and telecommunications sectors have seen a 1.4% increase, more intense in the North East (+2.3%) and in the North West (+1.9%), actually negative in Central Italy (-0.1%). Financial, real estate, professional and business services, livelier in the central regions (+1.3%), have dropped in the North West (-0.4%) and have grown in line with Italy in the South (+0.3%). However, southern industry, representing 13.6% of Italian industry and providing a 11.3% contribution to the productive activity of the South, has ensured  a 3.4% development, well above the 1% of Central and Northern Italy.

These data are correlated to the productive activity, whereas in the labour market the situation continues to appear distinctly positive for the North East (+1.8%) and for the South (+1.6%), both above the national growth (+1.3%). More modest results have been observed in the North West (+1%) and in Central Italy (+0.6%), that has also been the area in which the lowest GDP development has been registered (+0.7%).

What will be the results for the current year? The next edition of Scenari per le economie locali (Scenarios for local economies) which will appear at the end of July shall point out the growth path for the breakdowns, regions and provinces in coming years.